The politics of the new governing coalition offer insight into the direction in which Israel is heading.

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Daniel Levy is director of the Middle East and North Africa program at the European Council on Foreign Relations, based in London. He is also senior research fellow at the New America Foundation.

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Washington, DC - Israel's largest opposition party has joined the Prime Minister's coalition rather than go to elections, and has done so at a bargain-basement price. The move is not exactly standard political MO for oppositions, but not entirely inexplicable either.

From today, Israel has a governing coalition composed of seven parties, with ninety-four MKs, that comprises approximately 80 per cent of Parliament. Most of this was about raw political calculations. But it also offered an insight into a man, Benjamin Netanyahu, who has become one of Israel's longest-serving Prime Ministers, and into the direction in which he might now be taking the country.

First, some more about the politics in order to understand what happened. Netanyahu was, it seems, ready to go for early elections with

Washington, DC - Israel's largest opposition party has joined the Prime Minister's coalition rather than go to elections, and has done so at a bargain-basement price. The move is not exactly standard political MO for oppositions, but not entirely inexplicable either.

Today, Israel has a governing coalition composed of seven parties, with ninety-four MKs, that comprises approximately 80 per cent of Parliament. Most of this was about raw political calculations. But it also offered an insight into a man, Benjamin Netanyahu, who has become one of Israel's longest-serving Prime Ministers, and into the direction in which he might now be taking the country.

First, some more about the politics in order to understand what happened. Netanyahu was, it seems, ready to go for early elections with September 4 as the proposed date; his position was strong, almost unassailable. Elections are rarely an entirely smooth ride.

Netanyahu faced some uncomfortable bumps along the road, such as whether to implement a Supreme Court ruling to evacuate a settler outpost near Bet El in the occupied West Bank, or the threat of extremist rhetoric accompanying primaries within his own Likud party (undermining his international and domestic claim to being mainstream).

Post-election, assuming victory, he could expect to face a tricky balancing act in piecing together a new governing coalition, including how to re-appoint the rather useful Ehud Barak to the defence ministry given that man's lack of popularity and by extension electability.

Political reshuffling

The prospective Israeli election already had something of a surreal quality to it, given that all of the larger (or to be more accurate, mid-sized) opposition parties had expressed some sort of willingness to serve under Netanyahu in a future government. So we were set for an election about reshuffling coalitions rather than deciding who would be leader or what would be Israel's guiding political philosophy.

The apparently decisive move to postpone elections came when the Kadima party's new leader, Shaul Mofaz, (polling horribly in early surveys), sent out feelers expressing an interest to join the government. Mofaz's demands were minimal in the extreme: no replacing of existing coalition allies, no revisiting of coalition guidelines, and no ministerial portfolios (Mofaz alone of the 28 Kadima MK's will serve as a Deputy PM and Minister without a portfolio). Given those anticipated bumps on the road to re-election, the minimal cost of the alternative Mofaz offered, and also given the reasonable Netanyahu calculation that - surprises notwithstanding - it would be unlikely for him to face a much stiffer challenge at elections due in 17 months, Netanyahu embraced the idea of heading an outsized coalition, the largest in Israel's history.

While narrow political calculations were a driving force, it would be mistaken to see this in exclusively political terms. It is hard to point to too many achievements that Netanyahu has notched up in his two terms as Prime Minister, at least outside the economic realm. In most countries, an economic policy legacy, whether praised or criticised, might be enough. But Israel is not most countries. Netanyahu as a leader has pursued neither peace overtures nor military conquests. Yet it would be wrong to conclude from this that he has no north star guiding how he navigates the ship of state.

Netanyahu's cumulative track record suggests that an Israel in stable equilibrium with its neighbours, let alone peaceful coexistence, is not a proposition he views as attainable and perhaps not even desirable. He appears to have a catastrophist vision of Zionism and of Jewish life. Netanyahu sees his role as being the defender of the security of the realm while settling relevant parts of the Biblical patrimony and viewing his own state as the front-line in a Judeo-Christian civilizational struggle in a turbulent region whose indigenous culture he does not trust. None of the above easily translates into diplomatic achievements - at least not of the more traditional peace-making or alliance-expanding kind. It rather suggests that success is best measured in terms of bad things being avoided.

Stated goals

How does all that relate to the stated goals of the new outsized coalition? PM Netanyahu presented a four point agenda for the new coalition: (i) a new law on military service to replace the Tal Law (in particular addressing service for the ultra-orthodox and Arab Palestinian communities), (ii) reforming Israel's system of governance (a stronger executive, less coalition horse-trading), (iii) passing a new budget, and (iv) managing the peace process and Israel's external threats.

The latter two options represent little in the way of change. Those can be disposed of in short order. The budget will be more of the same: a combination of neo-liberalism and public investment where the red lines of his coalition allies would otherwise be crossed. This coalition will also be devoid of new tidings when it comes to the Iranian or Palestinian issues or Israel's regional positioning more generally.

On Iran, Mofaz will be a somewhat more measured and cautious voice if his previous statements are anything to go by, although given that Mofaz has the reputation of being the biggest flip-flopper in Israeli political history, that might not add up to much. He will likely echo the distinct lack of enthusiasm for an Israeli solo military strike promoted by the country's security chiefs. But Netanyahu continues to hesitate regarding the Iran file, and has, it seems, not decided whether to go it alone and still remains susceptible to pressure. Speculation that the new coalition escalates the chances of military action should be taken with a pinch of salt. Netanyahu will continue to bluff and bluster but no dramatic change should be expected.

On the Palestinian front, the new coalition may be less susceptible to far-right hijacks, for instance on withholding Palestinian tax revenues or taking a more in-your-face approach to settlement expansion. At the same time, though, it will not be a harbinger of any territorial compromise or respect for international law. Mofaz may present a less pugnacious posture on the Palestinian front and be an easier partner for maintaining the on-again off-again peace process status quo, but that will not change the broader dynamics in play: the entrenchment of an immovable Israeli presence beyond the green line and the slippage of the two-state paradigm.

Israel is in need of a new social contract that takes an inclusive approach to the non-Jewish Palestinian-Arab population and also to the ultra-orthodox, creating a long overdue democratic rather than ethnocratic basis for shared citizenship.

Possibility of change?

But where this new coalition might leave its mark and might allow Netanyahu to point to a broader legacy of change is on the question of military service and governance reform. Those were the two issues emphasised by Netanyahu and Mofaz at a press conference presenting their new arrangement, albeit with no specifics, and those are the areas that the new coalition may be best positioned to act on. For Netanyahu, and probably for many Israelis, this might go down as quite an achievement.

It is, however, questionable whether any such a legacy will be positive or constructive. The ultra-orthodox may feel the need to engage and compromise regarding military service. But the eleven members of Knesset from non-Zionist parties and representing the vast majority of voting Arab-Palestinian citizens of Israel are unlikely to even be consulted when it comes to changes greatly impacting that community.

While the new coalition is large, it might be particularly ill-placed to undertake major reform of either national service or of the structures of democratic governance. The last three years have been marked by anti-democratic and sometimes racist legislative initiatives coming from members of the governing coalition often supported by Kadima MK's. That trend of favouring the narrowly Jewish over the broadly democratic may even become more and not less pronounced.

Israel is in need of a new social contract that takes an inclusive approach to the non-Jewish Palestinian-Arab population and also to the ultra-orthodox, creating a long overdue democratic rather than ethnocratic basis for shared citizenship. That is unlikely to happen. The new government, led by Benjamin Netanyahu, Ehud Barak, and Shaul Mofaz - three veterans of the IDF's elite special forces unit - and facing a smaller opposition, may further suck the oxygen out of Israeli democracy.

That limited opposition (ostensibly made up of 22 MK's), headed by the new Labour Party leader Shelly Yachimovich and including the civil rights-oriented progressive Meretz party and the non-Zionist parties (Hadash, Balad, and the United Arab List) will be better placed to present an alternative if they can work together and build elements of a common counter narrative. And while Yachimovich might grow into the role of opposition leader, and might start to delineate progressive positions across a range of issues, not least those relating to the territories that, for now, seem a long way off.

Rather than placing most of its eggs in the thoroughly moribund and corrupted basket of the old peace process, the international community should be looking to place more emphasis on issues of democracy, rule of law and international law in its engagement with Israel.

Daniel Levy is a Senior Fellow at both the New America Foundation and the European Council on Foreign Relations.